Suppose policy makers are concerned about a shortage of long-term capital investment. To remedy the problem, various plans to cut capital gains taxes have been suggested. The delay in picking a plan is called the _____.
a. implementation lag
b. policy coordination problem
c. decision-making lag
d. recognition lag
e. effectiveness lag
Question 2
Policy makers may not know that the economy is in a recession until six months after the recession starts; this phenomenon is known as the _____.
a. implementation lag
b. policy coordination problem
c. decision-making lag
d. recognition lag
e. effectiveness lag
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